FAS World Agricultural Production Report, Focus on Wheat and Soybeans

On Friday, the the USDA’s Foreign Agricultural Service (FAS) released its monthly  World Agricultural Production report.  Today’s update includes highlights from the report, with a particular focus on wheat and soybeans.

FAS indicated that, “Ukraine wheat production for marketing year (MY) 2023/24 is forecast at 17.5 million metric tons, up 6 percent from last month, but down 16 percent from last year and 34 percent from the 5-year average. Yield is forecast at 4.07 tons per hectare, up 6 percent from last month, 3 percent from last year, and 2 percent above the 5-year average.

“Harvested area is forecast at 4.3 million hectares (mha), unchanged from last month, and down 19 percent from last year and 35 percent from the 5-year average.”

Friday’s report explained that, “In the early morning of June 6, 2023, an explosion caused the collapse of the Kakhovka Dam located on the Dnipro River in the Kherson oblast in the Steppe zone. Some of the major crops grown in the region such as wheat and barley are rain-fed. The reservoir, however, feeds a net of irrigation systems that are used for the irrigation of vegetables, oilseeds, and rice.

Initial examination of satellite imagery shows a relatively minimal impact of the dam collapse on agricultural lands in the region.

“USDA is still evaluating the implications of the event on agriculture in the region. As discussed in the next paragraph, however, the occupied territories are currently not reflected in any official statistics used to inform USDA’s forecasts. It is, therefore, expected that the impact of the dam collapse on USDA’s production numbers for Ukraine will be negligible.

“At present, Ukraine can be divided into areas in conflict and areas not in conflict. As elaborated by USDA’s POST in Ukraine, due to the ongoing war there is neither official nor reliable information about the status of Ukraine’s agriculture in the conflict zone. As a result, the area and production data currently provided by POST, Ukraine’s Ministry of Agriculture (MinAg) and the State Statistical Service of Ukraine, which inform USDA’s forecasts, do not reflect the whole country. For the MY 2023/24 season the MinAg planted area information for both the MY 2023/24 winter and spring crops excludes the temporarily occupied territory of the Donetsk, Zaporizhzhia, Luhansk, and Kherson regions. This is based on an official note included in the daily MinAg planting reports. MinAg also does not include Crimea. USDA crop production estimates for Ukraine include estimated output from Crimea. Crimean area and production numbers are extracted from the agricultural crop reports provided by the Russian Statistical Agency, Rosstat.”

FAS also pointed out that, “Russia wheat production for marketing year 2023/24 is forecast at 85.0 million metric tons (mmt), up 4 percent from last month, but down 8 percent from last year, and up 7 percent from the 5-year average.”

With respect to India, FAS indicated that, “USDA estimates marketing year (MY) 2023/24 India wheat production at a record 113.5 million metric tons (mmt), up 9 percent from last year.”

And turning to the EU, Friday’s report stated that, “Wheat production in the European Union (EU) for marketing year (MY) 2023/2024 is estimated at 140.5 million metric tons (mmt), up 1.5 mmt (1 percent) from last month, up 6.2 mmt (5 percent) from last year, and 6 percent above the 5-year average.

“Harvested area is estimated at 24.4 million hectares (mha), unchanged from May, up 0.1 mha from last year, and 2 percent above the 5-year average. Yield is estimated at 5.75 tons per hectare, 1 percent above last month, and 4 percent above both last year and the 5-year average.”

In a closer look at soybean production, FAS stated that, “Argentina soybean production for marketing year (MY) 2022/23 is estimated at 25.0 million metric tons (mmt), down 7 percent from last month, and down 43 percent from MY 2021/22. Soybean yield is estimated at 1.67 tons per hectare (t/ha), down 7 percent from last month, and down 40 percent from MY 2021/22. Harvested area is estimated at 15.0 million hectares, unchanged from last month, and down 6 percent from MY 2021/22.”

And with respect to Brazil, FAS explained that, “Brazil soybean production for marketing year (MY) 2022/23 is estimated at a 156.0 million metric tons (mmt), higher by 1.0 mmt (1 percent) from last month, and higher by 25.5 mmt (20 percent) from MY 2021/22.

“Harvested area is estimated at a 43.9 million hectares (mha), 0.2 mha (less than 1 percent) higher from last month and up 2.3 mha (6 percent) from the previous season.

“The yield remains unchanged from last month at 3.55 tons per hectare (t/ha), up 13 percent from the previous year.”